ODAC Newsletter - July 17

Welcome to the ODAC Newsletter, a weekly roundup from the Oil Depletion Analysis Centre, the UK registered charity dedicated to raising awareness of peak oil.

The Nabucco gas pipeline project came a step closer to reality this week as Austria, Turkey, Bulgaria, Romania and Hungary came together to sign a transit agreement. The project, aimed at reducing Europe’s reliance on Russia and the Ukraine transit route, still has significant hurdles to overcome. Gas supplies must be secured in a Russian-dominated market where the competing main players are Iran, Iraq or the ex Soviet states of Turkmenistan and Azerbaijan (and, longer-term, Kazakhstan). Geopolitics will no doubt continue to play a significant part in Europe’s energy dependency whatever the outcome.

Reducing UK dependence on imported gas and oil is just one of the drivers for the government’s energy white paper The UK Low Carbon Transition Plan released on Wednesday. The plan brings together many previously announced strategies and initiatives, but adds a timeline and structure along with increased government powers over the National Grid. A companion report the UK Renewable Energy Strategy 2009 maps out the path to the government’s 30% renewables target and a real shift from fossil fuels. A CBI report also released this week challenges the government bias towards renewables calling for a greater focus on nuclear and clean coal.

One area of energy security and policy which the white paper entirely misses out is peak oil. While the report acknowledges that the UK’s own oil and gas production is in decline and that “In the longer term we need to reduce our dependence on oil.” In the short to medium term, the plan actually sees UK oil consumption increasing – “Demand for oil is set to rise through to 2020 in the UK, driven by higher demand for diesel oil in motor transport and aviation fuel.” The dual assumptions that this will be possible and that the oil price by 2020 will be$80/barrel (described as the ‘Timely investment, moderate demand scenario’) ignores the warnings not just of peak oil commentators, but the International Energy Agency which has continually warned of the possibility of an oil crunch within that timeframe. Ed Miliband has stated previously that he is “in the business of optimism”. Where peak oil is concerned he appears to be in the business of ‘ostrichism’ – or burying his head in the sand.

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